SA has promising future as international arbitration centre

SA is making up for lost time as a competitive international arbitration centre. In the past, international disputes were rarely referred to the Arbitration Foundation of Southern Africa (Afsa) – the most prominent and widely recognised of SA’s arbitral institutions. However, in 2018 a total of 18 international disputes were referred to Afsa for arbitration, with a total quantum in excess of R640m. In 2019, Afsa reported 24 new cases with a combined total value of R3bn. Bowmans’ Jane Andropoulos, Tori Herholdt, Tumisang Mongae and Jonathan Barnes believe this increase coincided with the commencement of the International Arbitration Act – which brought SA’s international arbitration legislation into line with other jurisdictions throughout the world. It gave investors the comfort that they now had access to ‘a credible, well-established alternative dispute resolution dispensation that meets international standards and is in line with international best practice’. Writing in Business Day, the authors note that the Act incorporates the UN Commission on International Trade Law (Uncitral) on International Commercial Arbitration into SA law. ‘Schedule 1 to the International Arbitration Act is, in effect, a restatement of the Uncitral model law,’ they add.

The authors point out that it is not only the law that has been modernised and improved in this country. ‘SA’s arbitral institutions have fast learnt to use the developing technology designed for virtual hearings, enabling parties to participate in an arbitration from different geographic locations.’ Other changes include the development of Afsa’s international arbitration division (including its recent publication of draft rules for international arbitration), as well as various improvements to the infrastructure and resources used in international arbitration. These include the digitisation of SA’s courts and the uptake of technologies that facilitate virtual hearings and e-discovery. ‘The result is increased access to arbitration proceedings held in SA and to SA’s courts in instances where parties to arbitration proceedings are required to approach them for assistance in enforcement or for interim relief.’ They say cost is one of the biggest benefits of using SA arbitration institutions, as legal services, infrastructure and additional arbitration services are cheaper than those in more developed countries. The authors add: ‘The outlook for SA’s efforts to establish itself as an international arbitration centre seems promising – demonstrating the positive effects that can result when the law is attuned to investors’ priorities and private sector capacity is harnessed effectively.’

Full analysis in Business Day